For decades, the Dow Jones Industrial Average has been hailed as the ultimate benchmark for long-term investing success. Investors, analysts, and financial media constantly praise its performance, often portraying it as the premier wealth-building vehicle. But there’s a catch: unlike gold, the Dow is not a constant.
Over the past century, underperforming companies in the Dow have been quietly removed and replaced with stronger performers. Once-prominent names like Union Carbide and Massey Ferguson were left behind as the index evolved to maintain its upward trajectory. This constant reshuffling ensures the Dow always reflects a select group of thriving businesses, making it seem like an unbeatable long-term investment.
Now, let’s compare that to gold. Unlike the Dow, gold doesn’t change. It has been a store of value for thousands of years, immune to corporate failures, economic shifts, and index rebalancing tricks.
Yet, despite all the noise about the Dow’s strength, gold has actually performed just as well, if not better, over the past 100 years.
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The attached chart above illustrates a remarkable reality: gold has kept pace with the Dow over the long run despite being dismissed as a relic by mainstream finance. From its fixed price of $20.67 per ounce in the early 1900s, before President Roosevelt changed the fix in 1933 to $35.00 and prohibited U.S. investors from holding gold, savvy investors responded by doing the next best thing: investing in gold properties north of the border, in Canada’s prolific goldfields. This wave of capital helped fuel exploration booms that led to some of the most significant gold discoveries in North America.
That represents a move of over 10,000%, comparable to the Dow’s ascent, without the benefit of removing underperformers along the way. The narrative that gold is an “old-fashioned” or a “pet rock” investment, while the Dow represents the future, simply doesn’t hold up to scrutiny.
This begs the question: If gold has matched the performance of an ever-evolving index, what happens when gold’s true monetary role reasserts itself in an era of extreme money printing, debt expansion, and de-dollarization?
With gold prices at record highs and institutional investors taking notice, we may be entering a new phase where gold not only keeps pace with the Dow but decisively outperforms it.